News Story

‘Unequal Funding,’ Claims Report — And Leaves Out Major Share Of School Revenue

Report on financial disparities ignores federal funds that help poor communities

A new school funding report getting attention from some Michigan media outlets and liberal groups says that public schools serving the state’s poorer communities are underfunded. But the report released by a nonprofit called EdBuild failed to include $1.7 billion of federal funding in its analysis. The money it omitted makes up a significant share of school revenues, especially in districts that serve low-income populations.

Federal aid is the annual revenue stream that gives school districts in poorer Michigan communities a decided funding advantage over more affluent districts.

For example, Benton Harbor Area Schools received $13,098 per pupil in its general fund in 2017-18, according to the Michigan Department of Education. The sum included local, state and federal funds, and it was far higher than the statewide average of $10,190 per pupil.

Most of the difference resulted from federal funds, which came to $2,399 per student in Benton Harbor but only $465 per student for the state average. The Berrien County district got more because 81% of Benton Harbor’s students were labeled as “economically disadvantaged,” which means they are eligible for state and federal meal subsidies or other social welfare benefits.

Importantly, the federal dollars are not just for optional extras. They are meant to boost districts’ spending on regular school operations. For example, Benton Harbor Area Schools uses some of its federal dollars to pay teachers.

Across the state, school districts serving poorer communities are well-funded because of federal aid, which is by design.

School districts in Flint ($2,964 per pupil), Detroit ($2,684 per pupil) and Saginaw ($1,774 per pupil) all received federal funding far greater than the state average.

EdBuild’s report was titled, “Dismissed: America’s Most Divisive School District” and released on July 25. The group says its mission is to bring “common sense and fairness to the way states fund public schools.”

“As if quarantining students of color, we have forced them into racially dense and underfunded systems, and then built walls around them,” the EdBuild report stated.

The group’s report was picked up by the state media.

Michigan Radio quoted EdBuild referencing “the status quo of illogical and inequitable school funding.”

The Green Party of Michigan characterized Michigan’s school funding system as “racist” in a July 25 Facebook post.

(The funding system is largely the product of a 1994 bipartisan legislative ballot initiative called Proposal A, which was approved by 69.2 percent of Michigan voters. It established a per-pupil funding floor for all school districts, and over time, it has gradually reduced funding disparities across districts.)

The EdBuild report compares two primarily white school districts in affluent Michigan cities with two mostly black districts in poor cities, all in Oakland County: Pontiac and Bloomfield Hills, and Oak Park and Berkley. It labeled both Pontiac and Oak Park schools as a “disadvantaged district” and Bloomfield Hills and Berkley schools as an “advantaged neighbor” and showed the annual funding levels for each.

But the revenue that appears under those labels is not the total revenue each district receives. It does not include federal dollars, which are an integral part of annual school operating budgets. Pontiac’s federal aid, which comes to $2,981 per student, is not mentioned in the comparison with Bloomfield Hills, which received just $341 per pupil in federal aid.

The same goes for the comparison of the Oak Park school district and its “advantaged neighbor,” the Berkley district. Oak Park School District received $594 per pupil in federal aid compared to Berkley’s $260 per pupil, but neither amount figures in the EdBuild funding comparison.

Matt Richmond, chief programs officer of EdBuild, defended the decision to not include federal dollars in the analysis.

“It is every state’s responsibility to ensure the provision of their schools and if the resources provided are found lacking then responsibility lies with the state to remedy that,” Richmond said in an email. “Therefore we don’t believe federal money to be an appropriate inclusion in an analysis of funding equity, either constitutionally or by federal law. States have a responsibility and they should not be let off the hook.”